Grooveshark Lawsuit from Universal Music is Heavy Duty

Streaming music site Grooveshark is in a lawsuit Universal Music Group for copyright infringement over posting pirated songs, due to records and emails obtained by Universal Music Group. The Grooveshark lawsuit was filed against the music service on Friday. Allegedly a number of Grooveshark employees were uploading music to the site themselves, to make streaming music available to Grooveshark users. Digital Music News tells us that "Grooveshark employees are instructed to actively upload unauthorized music to the Grooveshark site, often against the wishes of the copyright owners and under the guise that random users are to blame."

Grooveshark is the latest streaming music site to get hit for choosing what could be the wrong way to create streaming music sites. The lynch pin here is that if a user uploads copyrighted content, the streaming music site is usually not responsible for their behavior (according to the Digital Millennium Copyright Act), as long as they respond to take down requests from the copyright holder. If the Grooveshark team was actually doing the uploading to the site to make streaming music available, that's a whole different ballgame.

"The label is also seeking the maximum in monetary damages of $150,000 per infringing act. If at least 1,000 of Universal's songs were infringed, the total in damages could be well into the hundreds of millions," reports CNET. That's enough cash money to crush a site like Grooveshark, unless they have investors that are willing to throw in big money.

There was a Grooveshark copyright infringement lawsuit filed earlier this Summer, from Mark Farner of Grand Funk Railroad, "Rhinestone Cowboy" Mark Weiss, and EMI music, but EMI settled. Universal Music Group filed back then, and the latest Grooveshark news appears to be an extension of that original filing. Grooveshark has an area of its site dedicated to DMCA compliance, so it looks like the site is on track for maintaining a copyright front and acting in good faith. But if they were uploading the music themselves, that changes everything.

As far as the Grooveshark vs. Spotify debate goes, Spotify wins this one because they went the route of striking deals with major labels before launching. Other streaming music sites that have launched without major label consent face either tough, after the fact negotiations with international recording labels (and high-priced, heavy duty lawyers) or giving up. See Pandora Radio as an example of how crushing giving up part ownership of your company can be if you go that route. It appears that Grooveshark does have a deal in place with Merlin, so a number of independent labels are licensing their music to Grooveshark. Someone please correct me in the comments if I'm wrong, and add any others that you know they're licensing. Either way, you're going to pay for having a music service that relies solely on offering copyrighted content without consent of so many copyright holders.For the Grooveshark iPhone people and the Grooveshark Android people, this may change one of the ways you've been finding new music.